AF Gruppen ASA

Hello, and a warm welcome to the presentation of the fourth quarter of 2024 for the AF Group. Today's theme will be a large project in facilities, and will be presented to the board of directors for facilities and property, Geir Flåta. After the presentation, there will be an opportunity for the audience to ask questions. Main points in this quarter. We had a turnover that ended at just under 8.6 billion, and a result before tax of 589 million, which gives a result margin of 6.9%. The cash flow from the drift was at 1.8 billion in the quarter and over 2.2 billion before the year. The order amount was 12.5 billion, and we had an order reserve from 2024 of 40.3 billion. Net profit per 31.12 was 99 million, and we have a result per share for 2024 of 6.52 kroner per share. The board proposes an exchange rate of NOK 5 per share for payments in the first half of 2025. We start with safety and health first, as always in the AF Group, because our main goal is for everyone to come home safely for the first day. We start with the H1 value, which is measured by the number of waste damage and serious personal damage without waste. We include our sub-entrepreneurs and measure per million executed hours. In the fourth quarter, we had one event that gave us a H1 value of 0.2 for the quarter, and we have accumulated 0.5 for the year in total. This trend combined with the H2 trend in H2 value is a development in safety performance that we are very pleased with, and that is at a level we have not been at before in AF. However, one event is one too much, and the next one can be fatal. So this is history, and we put it behind us. In the future, we will continue to strengthen the survival in the primary school of safety work in AF, with a focus on good risk management. If we look further at health care, it ended at 4.5% in the quarter, and last year it ended at 4.1%, the same as last year. We are targeting a sick leave of absence down to 3%, because we believe it is part of contributing to high productivity, a good working environment, and at least it says something about productivity. If we go back to the numbers, we have had a weak growth and ended up at 8.6 billion. The result before the tax improved from 292 to 589 million, which gives a margin of improvement of 3.4 percent points and ended up at 6.9 percent. When we look at the return on invested capital, it is a bit easier to talk about when the bottom line follows along. With a result before tax, and we put back the interest rates, we have it at the bottom at 1.2 billion, and then we have an average invested capital of just over 4.8 billion, and that gives us a return on invested capital of 24.8%. and that is above our target of 20%. Whether the project is large or small, whether it is with or against, whether it is at the start or end of the project, we must pay attention to the money and have the least amount of kroner. The power supply for Drifta this quarter has been at 1.8 billion, and last year it was 2.217 billion, which is a strong strength. The billion is found in liquid funds to the right in this figure. And then we have interest rate forecasts, and we have leasing obligations on machines and housing leasing obligations and interest rates. But the sum in an interest rate forecast of 99 million, which is a strong improvement from last year. If we add that we have a draw facility of 3.5 billion, we have available liquidity in the company of over 4.3 billion, and we mean to say that we are in a solid financial position. When we look at the balance, there are some significant differences here. We have invested about 285 million in our own capital, so we are on the right edge, and 3.5 billion on that. And the sum of... The sum of equity is about 15 billion, which gives us an equity share of 23.2%. The exclusive effect of IFRS 16 is 24.5%. The board has agreed to offer an exchange rate of 5 kroner per share in the first half of the year, and further that it in its entirety will be divided as a return payment in the long term. EILE has a responsibility to minimize the footprint that the business affects the climate and the environment. In 2024, we have sorted almost 235,000 tons of waste with a source sorting rate of 88, 86 and 95 percent, which is well above the authority's requirement. We have also sorted over 27,000 tons of metal, and our environmental parks have recovered over 303,000 tons of mass. In total, the last two have contributed to tracking the environment for more than 138,000 tons of CO2 equivalents. We are going to go around and look a little under the armor and down at our business areas and how it has played out in the fourth quarter. We start with facilities that in the highest degree have had a positive impact on this quarter. They have had a growth of about 30% and ended at about 2.8 billion, with a operating result of 249 million. This gives a operating margin of a strong 8.9%. Fandleg has a record high annual turnover and they deliver very good results. They are also a target machine and transport, VSP and stone set and RS, while Eikon has low accuracy and a weak result in this quarter. We have entered, as mentioned in the last quarter, phase 2 of our largest contract so far at Huseby. And there has been a report earlier this week on another project we are familiar with. Geir will come in on that in his presentation. So we conclude that the order entry was at 4.8 billion, and the order reserve at 16.4, which we take with us out of this quarter. If we go over to construction, we have a revenue of just below 2.4 billion, with a operating profit of 118 million, which gives a operating margin of 5%. It is construction renewal that, among other things, Rehabilitate at Brynsengfare, six foreigners, as you can see a bunch of them here in the picture, together with Bygg Østfold, Strøm Gunnarsen, Strøm Gunnarsen Vestfold, Haga Berg and OBF, who deliver extremely good results in the quarter. Bygg Oslo and HTB have good results. There are six new contracts in the quarter. I will mention some of them here. Bygg Oslo, which has a total interest rate on the Diakonhjemmet campus in Oslo. Lab Entrepeneur in Bergen, which has entered a contract with Oboes Ny Hjem on apartments. And Bygg Fornyelse, which has signed for Linnstof Rehabilitation for the quarter in Oslo. The sum of these three here is a little over 1 billion, and together with the rest of the turnover in the quarter, we ended up with 4 billion in turnover, and an order reserve that is happily up to 11.1 billion. Betongmast has had over 12% growth, ending at a turnover of over 1.3 billion, and a operating profit of 92 million, giving a operating margin of 7%. Betongmast Oslo, Trøndelag, Romerike, Røsand, Inlandet, Asker & Bærum and Østfold all deliver extremely good results. We have Buskerud Vestfold, which has built the business building Saga in Larvik, as you can see in the picture here, which delivers well in this quarter, while Boligbygg delivers weakly in this quarter as well. Here are four new contracts, including the construction of Håvind Children's School in a co-operative enterprise, and the total order volume for concrete masts was 1.1 billion, and the order reserve is 4.8 billion. The housing sale has been announced, and in the fourth quarter the revenues and announcements will be at 7 million, and we have a operating profit of minus 11 million, on an invested capital of 846 million. There is only one ongoing housing project, Rolls-Royce Arena, which we have at the end of the quarter at 194 units under production, and with a sales rate of 49%. The development portfolio at Borli is over 1,400 units, while the portfolio at Næring is over 98,000 square meters. If we look over the grain, we have a turnover of just below 1.5 billion, with a operating profit of 75 million, which gives a operating margin of 5.1%. It is in the highest degree Kanonaden that is contributing to this, as well as Prefab Mælardalen, AF Bygg Syd, which also builds water relief projects in southern Sweden, as you can see an example of here with the Busør project in the picture. And then we have Hørnesand Byggreturer and HNB, which all deliver extremely good results in the fourth quarter. The rest of the entrepreneurial business, which we have covered in a number of quarters, has continued to deliver poor results in this quarter as well. We have registered four contracts in the quarter. We can mention, among other things, Kanonaden, together with Hitachi, which is going to build for Svensk Kreftnett. With 900 and 400 in the option, it is the largest contract we have entered into in the Swedish business. HMB has registered a couple, and ByggØst has also registered a housing property project in Solna, which we have received in the fourth quarter. The total turnover for Sweden is 1.8 billion kroner, and the turnover reserve is 4.8 billion kroner. Energy and the environment continue to deliver steadily and very well, with a turnover of about 400 million kroner and a operating profit of 30 million kroner, giving a operating margin of 7.4%. Both AF Energi and AF Dekom delivered very good results in the quarter, and Energi has also had an activity rise. The order volume is at about 400 million, and the order reserve is at 1.2 billion. If we look further to our offshore business, we had revenues of 258 million in the quarter, with a operating profit of 5 million, which gives a margin of 2%. Aeron delivers significant turnover growth and at the same time has a good result in this quarter, while Offshore Dekom delivers a weak result in this quarter. It is also a pleasure that the project on the Dutch sector has now contracted a vehicle for the completion of the project. It is also a pleasure that at the end of this quarter, Aeron has signed a contract with Stegras to be part of the construction of production facilities in northern Sweden for the production of green steel. The order was just over 300 million, while the order reserve ended at a little over 1.7 billion. When we look at the total order reserve, we can start by saying that we have had a record high order entry for AF at 12.5 billion in this quarter, which gives us an order reserve at 40.3 billion. This is divided by facilities at 16.4 billion, buildings at 11.1 billion, and concrete and concrete in Sweden at 4.8 billion, which are the largest contributions. We think this is a good order reserve to include in 2025. Then we have come over to today's theme part, which, as mentioned above, is large projects in facilities, and I would like to welcome Geir Flotta.

Thank you, Amund. My name is Geir Flotta, I am the director of the board of directors responsible for facilities and units in the AIF group. Now we can finally say finally, and it is very happy to be able to see Oleringer in the foreground of Lillander by. A long phase of collaboration is now on its way, and there is now an expectation of the start of construction on this fantastic project, E6 Rotary Storhavet, before March 1st. And then I will come back a little bit with a little more details about that project later. Two years ago, I had the pleasure of going a little closer to the AF supply company after Q4 in 2022. Today I will tell you a little about the development since then, and then I will use most of the time on our major projects. As Amund showed for AF as a whole, the supply company also has a good security performance in 2024, and the development has been good for a long time. At the same time, we feel the fresh air here every day, and we have to be far ahead in our shoes. Therefore, good risk management, survival, and care are important pillars for us. We have spent a year with high growth and value creation, and a turnover close to 10 billion, with a result margin of 7.5%. We have now set a goal in the strategy that we are now on the way to send from 2021 to 2024, that we would intensify the facility and nearly double our business, both in volume and with relevant high ambitions for profitability. And I would say that we have succeeded quite well. Now we are entering a new strategy period, and I can reveal that we have high ambitions for the future and will set new goals. Today I will focus more on our large projects, but at Anleggsvirksomheten we have a wide range of what we offer as services, where we operate, and we have a diversified portfolio. Every year we carry out two to three hundred projects, and they vary greatly in size and complexity. For example, when we build a new road, it takes several years. But when Fjærby for example carries out projects in mountaineering, it can take days, weeks or months. As you can see here, we have several brand items out of the AF brand in Andegg, and we have become a large family. Our companies carry out projects both within the new building and rehabilitation, i.e. to take care of what has already been built. We operate mainly in Norway, but we are curious about more tunnel operations outside of Norway, if the conditions are right. In Germany, we operate within the rehabilitation of concrete. And it is primarily AF facilities that run our large projects. We have increased the activity level in facilities in recent years, and we have the ambition to increase this further forward. And even though the order line in facilities normally stretches longer than the order line we see in buildings, we now see clear results in the results equation on the increased activity level. And including this week's stock market reports, the order reserve is now an all-time high. So if we correct a little, because we ate a little in January and so far in February, we are now over 22 billion in the order reserve. A large part of this order reserve will be implemented in the next two years, while some will last until 2030. And even though the order reserve is good, we have many ongoing exciting supply processes, and we have the capacity to take on far more projects. So, perhaps AF's most talked-about project that has not reached the construction phase. E6 Rotherød-Storhavet is a new complete road of 23 km, where we will design and build and where large parts of the existing road for the southern part from Rotherød to Vingerom will be reused, upgraded and used as a new two southern fields. And when we reuse existing roads, we reduce climate gas emissions by 88% in comparison with the construction of the new Sørgående Løp. And that is half of Lillandøy municipality's annual emissions. In addition, we have achieved significant climate gas reductions in other parts of the project, which I have mentioned earlier. In addition, a new tunnel will be built, which is 4.2 km long, which will move the traffic further north from the exit of the Mjøsa valley. And then it will go directly over to the bridge that I mentioned earlier, which is 540 meters long. And then it will go up to the new Lillehammer cross, which will be the main cross to Lillehammer, which is located on Storhovet. Where we will meet our ongoing project, which is E6 Storhovet-Øyer, which will be completed a few years before this project, at the beginning of 2027. It is also rare that we as a total engineer get the opportunity to influence a road project in an early phase. I have to say that it is a very patient team, two of them here today, that looks forward to starting the construction phase. We have cooperated well with new roads, both in this phase and in previous projects, ongoing projects, and we look forward to further cooperation for this project. The implementation of large projects in AF is nothing new. We say that it is part of our DNA. Our first project, DAMN Dockfly, which started in 1986, had a contract range of 500 million kroner in 1986. Here you can see some of our selected large projects, such as our entry into the oil and gas projects, where we then contribute to the land use of the gas that came from Troll on Kolsnes, the construction of Østre Vane on Oslo Lufthansa, large tunnel projects and road projects, and Nye Veier's very first development project, E18 Tvedesland Arndal. Much of our leadership philosophy, structure and then our culture is developed through these large projects. We have been so lucky to work for the largest and most future-oriented customers who have contributed to our development and who have made us able to take on even greater tasks. The breadth of the large projects is enormous, from extensive oil and gas projects to the largest road projects. Previously, we perhaps had one large project in progress, while we now see that the volume of our business is large projects. We have built strong teams over a long time, which have never been so robust, and with a diversity where young people with experienced wisdom challenge each other and improve best practices. We can take on the biggest tasks. Here you can see some of our ongoing large projects that are in the construction phase today. For the Oslo municipality, we carry out two large projects with a total value of over 16 billion kroner. The first project is the E6 clean water tunnel, which is carried out in a working community between AF and the Italian GELLA. The project covers a new tunnel throughout Oslo, and it is drilled with a tunnel drill machine, a TBM as it is called, and where we connect existing water networks. At Huseby, a new complete water treatment facility is being built. In Oslo, we are also implementing a new cable tunnel from Sogn to Ulven at Statnet. And then we have the project Stora over Øyer, which is a new road between Lillehammer and Øyer, where we are also building a new tunnel and a new road and upgrading existing roads. In Helgeland, we are building a new airport in Mo i Rana, a complete airport for Avinor, with a new roller coaster, taxiways and a complete terminal building. In Sweden, we have a large tunnel project on E4 across from Stockholm. At Aarhus, we say that we live off and for our projects, and our ability to manage them safely and profitably. We operate with the project industry. When our projects gradually become more complex across multiple dimensions, project management is a subject we must be best at. Therefore, our goal is to exercise the industry's highest standard for project management. We win and lose as a team. Therefore, we have to take advantage of each other's skills. We have to put it in the system and we have to play each other good. Leadership is a subject that must be developed. We have to train so that we choose the right projects for us. Within project management, there are many subjects we must be best at. Here you can see our basic principles for our project business. And so, earlier, we look for the risk we can affect. In our projects, we offer and carry out many professional disciplines, and we have many collaboration partners with us in the project implementation. The subjects we carry out ourselves, we will be best at. Therefore, we must prioritize hard, and we must train to become the best. We are constantly on the hunt for improved productivity by setting goals, measuring our own performance, and taking that into account in further planning and execution. We can simply say that we operate within four special areas in EGEN-regi. But many of these special areas have several subcategories, such as tunnel operations, which consist of tunnel operations, such as drilling, loading, combustion and unloading, for example, and underground services, which then secure the tunnel's lower edge with spray concrete and water and frost protection. Its basic work is a broad area within mass movement, water and drainage work, mountain combustion, protection, and more. In concrete work, we differentiate between building concrete and construction concrete. Building concrete is a more repetitive production compared to construction concrete, which is more fragmented. We have to train to be the best at both parts. In concrete rehabilitation, we have executive staff and we also deliver products through protectors that renew and extend life. Geopolitical uncertainty has gained a new dimension. But we believe that a diversified portfolio, a broad customer spectrum with small and large projects, and a rich selection of subjects and services is a good basis for further profitable growth for the company. We mainly operate as a project company, and we can prioritize our resources where they are most desired and where they give the most value. We must help our customers to achieve their goals, both in terms of costs and that they meet their climate and environmental goals. The defence will be built on a large scale throughout the country, and with a closer connection to the new NATO countries, Finland and Sweden, many new possibilities are expected. Strong percentage growth, we think, will still come into play in taking care of what has already been built of infrastructure. And many forms of cooperation in the value chain, such as the alliance model, we see good effects of, by everyone sitting in the same boat and actually rowing in the same direction. We believe in stable market conditions for our industry, that gives the most for the money. We must standardize and we must be more efficient. We must use more digital tools. We must use the power of AI and we must draw learning from several industries. We will continue to focus on building robust teams, carry out active risk management with more and even stronger self-production. And then we will build capacity by attracting, developing and maintaining the best people in the industry. To sum up, we have a robust portfolio, we have a solid order reserve that has grown quite strongly also in 2025, and we have a strong financial position. Our teams are becoming increasingly stronger, we have competent leaders and the best professionals and skilled workers in the industry. And we will develop more. We have a high degree of self-production, and we must be best at it. Everything we undertake must be risk-based, to identify both possibilities and obstacles, and this gives the basis for improvement that drives us forward. We have a broad service offer and a targeted approach over several years on large and complex projects that we will use in existing markets, new markets and new segments. And when you run a project industry with the best people in the industry, we will take care of the most exciting, profitable and developing projects for us. Thank you.

Thank you very much, Geir. I will now sum up the quarter. We had revenues of 8.6 billion, operating results of 607 million, which gives a operating margin of 7.1%. In addition, we had a cash flow of over 1 billion, and we have had an order entry at a record high of 12.5 billion, which gives us an order reserve of 40.3 billion. Styret has also provided an exchange rate of 5 kroner per share for payment in the first half year. We will put 2024 behind us, but for the fourth quarter, we can say that with good security performance, high profitability, strong cash flow and good order entry, we are very pleased with the quarter. We will continue to work thoroughly, steadily and hard If the wind blows with or against what we believe in and know will work. We will choose the right project. We will organize ourselves robustly. We will conduct good project and risk management. We will be ready for action. We will take care of the money. And last but not least, we will take care of our people. Og med det så ønsker jeg alle dem som har følgt oss på stream i dag, tusen hjertelig takk for at dere møtte opp. Ha en fin dag, og etter hvert, riktig god helg.